Discuss the southwest airlines use of game theory

Question

Assignment: Dealing with Risk, Asymmetric Information, and Incentives

Earlier in the quarter we discussed Southwest Airlines' use of game theory to create new strategy. Continue to research Southwest Airlines or a company of your choice and write a six to eight (6 to 8) page paper in which you:

1. Evaluate a company's recent (with in the last year) actions dealing with risk and uncertainty.
2. Offer advice for improving risk management.
3. Examine an adverse selection problem your company is facing and recommend how it should minimize its negative impact on transactions.
4. Determine the ways your company is dealing with the moral hazard problem and suggest best practices used in the industry to deal with it.
5. Identify a principal-agent problem in your company and evaluate the tools it uses to align incentives and improve profitability.